Asia stocks hold near highs, yields up on U.S. stimulus plans

Asia stocks near highs, yields up on U.S. stimulus risk

Stocks on Wall Street slipped ahead of the start of an earnings season that arrives with equities at record highs, and as House Democrats introduced an article of impeachment against President Donald Trump.

Apart from the charges on Trump, global investors also have an eye on the increase in the number of COVID-19 infections that has surpassed 90.37 million.

With Asian stock markets also falling, the MSCI All Country World Index, which tracks shares of 49 countries, fell 0.2%, just after Friday's record high.

The March contract of silver on the MCX is trading at Rs 64,659 per kg, higher by Rs 428 or 0.67 per cent.

Longer-term Treasury yields were at their highest since March after Friday's weak jobs report only fanned speculation of more United States fiscal stimulus now that the Democrats have control of the government.

Asian shares paused near historic highs on Monday while Treasury yields were at a 10-month top as "trillions" in new US fiscal stimulus plans were set to be unveiled this week, stoking a global reflation trade.

Expectations of a multitrillion-dollar stimulus plan and the belief the Federal Reserve will not act to counter rising interest rates, along with new Treasury supply are helping yields rise, said Gennadiy Goldberg, an interest rate strategist at TD Securities in NY.

The sudden lift in bond yields undermined gold, which pays no interest, and the metal fell back 1.1% to $1,828 an ounce from its recent peak of $1,959.

The spread between the 2-year and 10-year Treasury yield brushed against 100 basis points to hit its steepest since July 2017.


USA gold futures gained 0.8 percent to $1,849.70.

The climb in yields in turn offered some support to the down-trodden dollar, which had edged up to 90.439 against a basket of currencies from last week's low of 89.206.

Money markets have ramped up bets on USA interest rates rising in 2023, sending a shudder through global equities which may soon have to brace for the day the Federal Reserve starts scaling back aid to the economy.

Morgan Stanley recommended a neutral view on the dollar and closed a dollar-bearish trade versus the euro and the Canadian dollar, according to a note published last week.

Spot gold was up 0.1 percent at $1,849.64 per ounce by 1039 GMT, after touching its lowest since December 2 at $1,816.53.

South Korea reversed an early jump to fall 0.1%, and Chinese blue chips fell 1%.

Silver fell 0.9 percent to $25.15 an ounce, having earlier fallen to a near one-month low of $24.30.

Bitcoin last fell 9.98% to US$34,362.43. At its session low, the cryptocurrency fell 21% on Monday.

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